Internet Computer (ICP) Clings to Top 10 Market Cap
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Internet Computer (ICP) is an unexpected arrival on the crypto stage, landing immediately among the top 5 coins by market capitalization. Even after the price shakedown, ICP displaced older large cap coins like Litecoin (LTC) to take position nine. ICP traded at $164.21 on Friday, still sliding after an initial price discovery peak above $640.
ICP was a curiosity in crypto terms, as it appeared at once on all exchanges. The project also had significant backing from traditional investors, instead of relying entirely on its ICO. The Internet Computer project received several rounds of venture funding, with involvement from Andresseen Horowitz among others.
Internet Computer also performed a token sale to the public between April 1 and August 1, 2018, and is slowly releasing the tokens to new users. What is worrying about ICP is that its ICO only distributed 5% of tokens to investors, with 95% held by “Unknown” entities.
What is the Internet Computer
Internet Computer is a decentralized computation project created by the DFINITY foundation.
The team aims to achieve decentralized computation, which is also happening at the speed of regular Internet usage. ICP, however, does not style itself as the “Ethereum killer”. In fact, the project received funding from the Ethereum community back in 2017, and went on to develop its complete technology before launching.
The Internet Computer wants to compete both with fully decentralized blockchain projects, but also offer an alternative to the current Internet infrastructure for building and hosting apps.
ICP joins a growing list of projects that do not aim to displace Ethereum, but instead boost its computational capabilities with various side technologies. The reason for this is that the Ethereum ecosystem has already grown and established itself. The significant value locked and the user awareness mean a project will have more success in building alongside Ethereum, instead of attempting to disrupt its technology.
The Internet Computer relies on dedicated, standardized equipment, ran by non-anonymous teams. This allows for a higher capacity to run smart contracts, without the need fo pay for each transaction. While this arrangement sacrifices decentralization, the data centers are fully open to independent dApp creators.
The Internet Computer smart contracts can also sign transactions on the Ethereum and Bitcoin main chains. There is a possibility for a reverse bridge, through smart contracts that also communicate with the Internet Computer.
Is ICP a Good Investment
The first step to trading ICP is to ensure a secure wallet. The asset is now available on Ledger Nano, both for cold storage and as a hot wallet for immediate transfers.
Still, according to the crypto community, ICP has a wallet problem. Despite its highly developed tech, ICP does not have a dedicated wallet.
Because ICP is so new, it may still be added to existing multi-asset wallets.
For the short term, ICP is held on exchanges, which is riskier, but also gives access for retail adoption. ICP is available through the Coinbase wallet, and is immediately open to trading.
Is ICP Trading Risky
ICP has an admirable trading profile for a just-launched asset. Besides an immediate listing on Coinbase, ICP shows significant liquidity levels, comparable to large-cap coins and tokens. The liquidity score of ICP is above 600 for the Binance International exchange pairing.
The market is especially liquid in the ICP/BUSD trading pair, showing the asset has a special backing from the native Binance dollar-pegged coin.
More than 63% of all ICP trades happen on the Binance exchange, showing a highly centralized trading profile. For crypto assets, this usually means the potential for large price movements fueled by traders flocking in and inflating the price.
ICP is much less liquid on the Coinbase exchange, allowing for more slippage in its fiat pairings with the USD and EUR.
Did Early Buyers Dump Tokens?
The most telling sign of the risk of ICP is that there may still be sellers ready to depress the market. ICO buyers complained that not all tokens are locked, leading to the fast spike and crash when ICP trading started.
ICP has no fixed total supply over time, and its max supply available is above 469M tokens. Of those, 123M are in active trading, with more tokens to be unlocked. What is more mystifying, the Internet Computer project has not publicized its ICO token price, and the exact sum raised at that time.
So while there are investors reporting ICP tokens received as an airdrop or acquired at the token sale, there is no way to estimate the ICO returns. The lack of information plus the continued price slide made new buyers cautious, going as far as to call ICP a scam. For now, it is a highly visible project that may generate unexpected returns, but also erase investments due to the volatile nature of crypto assets.
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